Subpart 6.4 - Sealed Bidding and Competitive Proposals

Overview

FAR Subpart 6.4 prescribes the criteria for determining whether to use sealed bidding or competitive proposals in a government acquisition. It serves as the decision-making framework for Contracting Officers to ensure the most appropriate solicitation method is selected based on the nature of the requirement and the market environment.

Key Rules

• Mandatory Use of Sealed Bidding: Contracting officers must use sealed bidding (governed by FAR Part 14) when all four of the following conditions are met:
  1. Time is sufficient to solicit, submit, and evaluate bids.
  2. The award will be made solely on price and price-related factors.
  3. Discussions with offerors are unnecessary (the requirement is clear).
  4. There is a reasonable expectation of receiving more than one bid.
• Use of Competitive Proposals: Contracting officers may use competitive proposals (governed by FAR Part 15) if the criteria for sealed bidding are not met.
• International Default: For contracts performed outside the United States and its outlying areas, competitive proposals are generally the default method because differences in local laws and business practices usually necessitate discussions with offerors.
• Applicability: Both methods are acceptable for full and open competition (6.1), full and open competition after exclusion of sources (6.2), and, where appropriate, other than full and open competition (6.3).

Responsibilities

• Contracting Officer (CO):
  • Responsible for evaluating the acquisition against the four-part test in 6.401(a) to determine if sealed bidding is required.
  • Responsible for justifying the use of competitive proposals if the conditions for sealed bidding are not present.
  • Must determine if discussions are necessary, particularly in international contexts, to decide between the two methods.
• Program/Requirements Office:
  • Responsible for defining the requirement clearly enough to allow for sealed bidding if price is intended to be the primary factor.
  • Must provide the CO with the necessary "price-related factors" if choosing sealed bidding.

Practical Implications

• Objective vs. Subjective Evaluation: Sealed bidding is a rigid process where the lowest-priced responsive and responsible bidder wins; there is no room for "best value" trade-offs. If a agency wants the ability to pay a premium for higher technical quality (Trade-off Process), they must be able to demonstrate that one of the four sealed bidding criteria—usually the "no discussions" or "price-only" factors—cannot be met.
• Protest Risk: If a Contracting Officer chooses competitive proposals when all four conditions for sealed bidding are clearly present, the solicitation could be vulnerable to a pre-award protest by a contractor who prefers a price-only competition.
• Administrative Burden: Competitive proposals (FAR Part 15) are generally more resource-intensive for the government than sealed bidding because they allow for technical evaluations, past performance reviews, and rounds of negotiations (discussions).
• International Strategy: For OCONUS (Outside Continental United States) work, the FAR effectively grants COs more flexibility to use competitive proposals, acknowledging that the complexity of foreign markets makes the "no discussions" requirement of sealed bidding impractical.